- 18Mar
(Reuters) - A Milan court cleared Citigroup, Bank of America, Deutsche Bank and Morgan Stanley of market-rigging in a high-profile trial related to the 2003 collapse of food giant Parmalat.
The four international banks had been charged for allegedly helping the Italian food group mislead investors at the time of the Parmalat scandal, dubbed Europe's Enron.An Italian prosecutor had asked earlier this year that they should be fined and that about 120 million euros ($173.5 million) of their profit should be impounded.
The four banks had repeatedly denied any wrongdoing.
Parmalat, known for its long-life milk, buckled in December 2003 under a 14 billion euros hole in its accounts. Its demise wiped out the savings of more than 100,000 retail investors who had bought the group's investment-grade corporate bonds.
Italy's biggest listed food group is now at the center of a battle for control between French diary giant Lactalis, which has recently bought 29 percent of Parmalat, and a group of Italian investors trying to muster a consortium.
The Milan court also cleared all the executives at the four banks that had also been charged in the market-rigging trial.
"The Milan court"s judgment confirms unequivocally that Citi and its employees did not have any involvement in the execution of the most significant fraudulent bankruptcy in Italy," Citi said in a statement shortly after the ruling.
Bank of America also expressed satisfaction with the verdict.
Parmalat's founder Calisto Tanzi, who was the group's chief executive when the company went bankrupt, has been sentenced to 18 years in prison on charges of fraudulent bankruptcy and criminal conspiracy in one of several trials under way on the case.
Parmalat, restructured and relisted on the Milan bourse in 2005, has recouped more than 2 billion euros from settlements with banks including Morgan Stanley and Merrill Lynch, now part of Bank of America.
($1=.6918 euros)
(Writing by Lisa Jucca; Editing by Mike Nesbit)
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